MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI NAMO NARAIN MEENA)
(a) The fiscal deficit situation for the last three years and current
year is given below :
Fiscal Year Fiscal Deficit
As % of GDP Rs. in crore
2009-10 6.5 4,18,482
2010-11 4.9 3,73,592
2011-12 RE 5.9 5,21,980
2012-13 BE 5.1 5,13,590
Due to un-precedented global financial crisis, the Government had
to take fiscal expansionary measures to protect Indian economy from the
adverse impact of global financial crisis. This resulted in increase in
Fiscal Deficit.
Details of Current Account Balance:
2009-10 2010-11 2011-12 (Up to Q3 April-Dec. 2011)
Current Account Balance -38.2 -45.9 -53.6
(US $ billion)
Current Account Balance -2.8 -2.7 -4.0
per cent of GDP
During 2011-12, Current Account Deficit widened to 4.0 per cent of
GDP due to widening of trade deficit on account of higher imports of POL
and gold & silver.
(b) To lower the impact of gold imports on Balance of Payment, Government
has proposed to increase basic custom duty on standard gold bars, gold coins
of purity exceeding 99.5 per cent and platinum from 2 per cent to 4 per cent
and on non-standard gold from 5 per cent to 10 per cent. The government has
reverted back to the path of fiscal consolidation with gradual exit from the
expansionary measures in a calibrated manner. The reduction in Fiscal
Deficit from 5.9 per cent of GDP in RE 2011-12 to 5.1 per cent of GDP in
BE 2012-13 is designed with a mix of reduction in total expenditure as
percentage of GDP and improvement in gross tax revenue as percentage of
GDP.
(c) According to the latest IMF Executive Board Assessment (March 9th,2012),
`fiscal consolidation is crucial to crowd in private investment and lower
inflationary expectations, mainly through rationalization of fuel and fertilizer
subsidies and improvement in public expenditure management. There was support
for the planned reorientation of expenditure towards infrastructure and the
social sectors as well as tax reform, especially the introduction of the goods
and services tax.`
(d) Fiscal Policy approach of the government is determined by the country`s
own requirements. The government has reverted back to the path of fiscal
consolidation with gradual exit from the expansionary measures in a
calibrated manner. The reduction in Fiscal Deficit from 5.9 per cent of GDP
in RE 2011-12 to 5.1 per cent of GDP in BE 2012-13 is designed with a mix of
reduction in total expenditure as percentage of GDP and improvement in gross
tax revenue as percentage of GDP. With reprioritization of
expenditure towards developmental side and curtailing the growth in non-
developmental expenditure, total expenditure is estimated to decline as
percentage of GDP. Gross tax revenue as percentage of GDP with
additional resource mobilization measures is estimated to increase from
10.1 per cent in RE 2011-12 to 10.6 per cent of GDP in BE 2012-13.
